Capitalism
Socialism
Communism
- Became common during the Industrial Revolution, replaces mercantilism (strict government control over business)
- Capitalism = market economy
- Businesses owned by individual people not government (private ownership)
- Unrestricted free market (supply and demand)
- Little government regulation (little to no min. wage)
- Private companies decide what/how much to produce and for what price
- Healthy businesses can hire more workers
- Pro: Great opportunities to become wealthy, freedom to make your own decisions
- Con: Can result in large gaps between social classes
Socialism
- Mixed government- government owns some businesses or companies, others are owned privately
- Welfare programs to help gap between rich and poor
- Pros: Create more equality and higher standards of living for more people
- Cons: High taxes (43% average in Norway, 28% in USA), inefficient. Lots of trust in government
Communism
- Most economic decisions about production and prices made by government
- Most businesses owned by government
- Pros: More guaranteed employment, less financial downturns
- Cons: Less freedom for individuals to earn a profit, inefficiency
- Command economy
- No private property -actually- government owns most property
- Classless society because everyone is equal -actually- government leaders benefit the most because they make all of the decisions
- Everyone works to best serve the community -actually- ruling communist party begins to look like a dictatorship
- Karl Marx: philosopher and historian; co-wrote Communist Manifesto in response to poor working and living conditions during the Industrial Revolution; He argued class struggle would bring equality for all
- Russian Revolution 1917- communism's rise and start of the Soviet Union
- Communism also spread to China, Vietnam, Cuba, North Korea, and Eastern Europe